Coal miner Alpha Natural Resources Inc. (NYSE: ANR) has seen its share price decline by -64% in the past 12 months. The company should prepare for things to get worse.
In its fourth quarter and full year earnings report released today, the company posted a quarterly EPS loss of -$3.34, following a non-cash writedown of goodwill to the tune of -$745 million:
During the fourth quarter, domestic and international coal markets declined as a result of slowing economic activity, fuel switching for electricity generation due to low priced natural gas, and recently effective and anticipated U.S. environmental regulations that discourage the use of coal. As a result of these changes to the near-term market outlook as well as updated projections of production volumes and cash operating costs, and the Company’s market valuation as of the goodwill testing date, the implied fair value of goodwill at several reporting units was determined to be less than its carrying value, thereby necessitating the impairment charge.
On an adjusted basis, the company posted an EPS loss of -$0.07. The consensus estimate had been for EPS of $0.27. Quarterly revenue doubled year-over-year to $1.8 billion, but the consensus estimate called for $2.2 billion.
The company has already announced production cuts for 2012 totalling 4 million tons, or about 3.8% of 2011 annual production.
In pre-market trading, Alpha’s shares are down more than -3.5% at $19.11 in a 52-week range of $15.49-$61.66.
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